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Student Number | 1. 327985762. 327275613. 327985024. 328135045. 32810499 | Given name | 1.Shawn Cowan2.Zahidah Zain3.Sheikh Hussin Bin Mohamed Hairi4.Belly Ciuwinly Tjiu5. Handi Yosef Pranata |

Unit Code | BUS273E | Unit name | Consumer Behaviour | Date | 07/03/2016 | Assessment name | Team Assignment (Case Study 2) | Tutor | Mr Ken Kieran Ho |

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BUS 273E
Consumer Behaviour
Case Study 8.1
Facebook ‘Check-in’: A new form of E-Word-Of-Mouth

Group Members:
Shawn Cowan (32798576)
Zahidah Zain (32727561)
Sheikh Hussin Bin Mohamed Hairi (32798502) Belly Ciuwinly Tjiu (32813504)
Handi Yosef Pranata (32810499)

Word Count: 7443 words

Factor | Max Mark | Your Mark | Written Report | | | Issue / Problem | 7 | | Relevant Theory | 10 | | Application Solution | 10 | | Presentation / Use of Language | 3 | | | | | Presentation | | | Use of Visual aids | 3 | | Value of Visual aids | 7 | | Speed of delivery/Pace | 2 | | Clear and Understandable | 3 | | Discussion | | | Probing for alternative strategies | 7.5 | | Class involvement | 7.5 | | Total Mark: | 60 | | Comments: | | |

Content Page

1. Executive Summary……………………………………………………………7 2. Introduction……………………………………………………………………..8 3. Discussion Section…………………………………………………………..9-41 4. Recommendations………………………………………………………….41-44 5. Conclusion…………………………………………………………………….45 6. References…………………………………………………………………..46-53

Table of Figures

Figure 1: Changi Airport’s ‘Who Wants to Be a Millionaire Contest’ Facebook ‘Check-in’ Post ……………………………………………………………………………………...13

Figure 2: Starbucks Valentine’s Day ‘1 for 1’ Promotion Facebook ‘Check-In’ Post..………………………………………………………………………………………..14

Figure 3: Kaplan Singapore Open House Facebook ‘Check-in’ Post ………………15

Figure 4: Consumer Facebook ‘Check-in’ post at Waterway Point ………………….16

Figure 5: Check-in & Get Gifted’D’ Programme ………………………………………..17

Figure 6: Baskin Robins ‘Group Scoop’ Programme ……………………………........19

Figure 7: Inappropriate Response From A Service Provider Facebook Post ……....21

Figure 8: Appropriate Response From A Service Provider Facebook Post ………...22

Figure 9: KLM’s ‘Happy Holidays Surprise’ Viral Video Facebook Post …………….27

Figure 10: ‘Family Getaway Facebook Promotion’ Page……………………………..28

Figure 11: Tobi’s ‘50% Off First Purchase’ Marketing Pull Strategy………………….29

Figure 12: ‘Tobi’s ‘2nd Purchase’ Marketing Strategy ………………………………...30

Figure 13: Facebook’s Explicit and Implicit Purchase Information Page For Marketers……………………………………………………………………………………31

Figure 14: Dissatisfied Customer Ratings & Comments ……………………………...33

Figure 15: Alternative Restaurants Near Jamie Oliver’s………………………………34

Figure 16: Major Reference Groups……………………………………………………..36

Figure 17: Tiffany & Co Virtual Reference Group Facebook Page…………………..38

Figure 18: Yoganonymous Virtual Community Facebook Page Post………………..40

Figure 19: Facebook Post On ‘Lush Products Turned Girl Pink’ That Went Viral…..43

Figure 20: Trend Search System ……………………………………………………..…44

Executive Summary

In this report, we will be looking at Facebook’s ‘check-in’ feature which acts as a form of eWOM for companies or service providers. Based on the case study and the implications on the influence of eWOM on consumers purchasing decisions, we will be looking at ways for marketers to capitalize on the opportunity to ‘promote’ themselves.

Several recommendations are provided to cushion the fall in case negative eWOM is being spread about the brand. Frameworks and advertisements are also showcased in this report to further emphasize on our key findings.

Lastly, there are five questions that will be discussed accordingly. Based on the teams’ key findings, along with the inclusion of appropriate concepts, advertisements and frameworks, the questions were handled carefully throughout this report.

Introduction

Facebook is the most widely used social networking site in the world today and thus, it is wise for marketers to jump on this chance for marketing opportunities. Due to the rapid advancements in technology, most people out there have a smartphone and are able to ‘check-in’ on locations using the Facebook app. There are tons of companies, businesses and service providers out there who can utilize this ‘check-in’ feature in their favour.

Many people have an online persona in one way or another and use social networking sites, forums, blogs or other forms of online sites where they interact with people all over the world. This can lead to eWOM discussions on many things which in relevance on marketer of goods versus service marketers. EWOM is also very flexible in a sense that consumers are able to transmit and receive information on the fly without geographical constraints. WOM on the other hand is usually done face-to-face and thus is largely time and effort consuming. People can also find a tremendous amount of information online as opposed to the physical realm. E-WOM also saves costs, time and money in finding information as compared to WOM. This makes eWOM a crucial area for marketers to capitalize on in order to achieve optimal results in terms of marketing. When done right, eWOM are practically free advertisements for companies in the market. It is thus very important to manage positive and negative eWOM for companies to enhance and protect their image.

Differences in firm-generated versus peer-generated eWOM is also important and marketers should understand and implement ways where they can capture the attention of their consumers. Opinion leaders, with their large fan base can influence the perception of the goods and services provided by companies. Reference groups and virtual communities can also be another factor which influences an individual’s behaviour. Thus, marketers need to understand and manage eWOM efficiently to further enhance their marketing opportunities.

Discussion

QNS 1:

What is e-word-of-mouth (eWOM)?
The advent of the Internet and its interactive capabilities has introduced a new form of word-of-mouth, called electronic word-of-mouth (eWOM). (Hodza et al, 2012) Due to the digitalized world, traditional WOM has transitioned to eWOM. E-WOM is defined as ‘any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet.’ (Li, 2011) It refers to any statement made by consumers whom are typically strangers in sharing their opinions via the Internet such as web sites, social networks and instant messages about a product, service, brand, or company which is known to generate a sphere of influence. (Cheung & Thadani, 2012) Therefore, it is a form of consumer-to-consumer communication and has a significant impact on consumer’s purchasing decision process. EWOM has the ability in reaching a multitude of people at the same time and has a greater potential of becoming viral. EWOM that is typically executed via social networking platforms such as Facebook is deemed as an extremely valuable tool for service marketers to promote their brand through tools such as ‘liking’, ‘sharing’, ‘inviting’, commenting etc.

According to (Lehmann 2015, 1-4) “….consumers are no longer passive receivers of product-related information, but rather active communicators who seek fellow consumers’ opinions and offer their own.” Therefore, Facebook is a useful platform that offers several possibilities for eWOM to be influential. It allows consumers to ‘check-in’ to businesses online and share their likes and comments of their product or services encountered both visually and verbally. This shows a shift in the power of influence from marketers to consumers. (Lehman, 2015) Once a consumer ‘checks-in’, the post will be viewable on their timeline and newsfeed by many. They will be able to engage in social interactions as well as passing along eWOM on their brand preferences and experience. (Lehman, 2015) Thus, eWOM has a major influence in relation to consumer purchasing decisions.

Service Providers VS Marketer Of Goods

Service marketers are marketers that endorse economic activities through rendering of services such as hospitality, financial services, healthcare and etc whereas marketers of goods base on the sale of goods which has physical specifications and attributes such as clothing stores, electronic appliances and etc. (Madhavaram, 2011)

Products and services have some key differences that influence what goes into marketing them through Facebook. Service is something that is unfathomable hence it is hard to put a price tag on it. Although it is hard to be measured, there are guidelines that a service can be based upon such as tangibility, assurance and reliability.

First reason as to why eWOM is relevant to service markets as compared to marketer of goods is due to the intangibility of the service itself which means that services have no physical existence which cannot be touched, tasted nor felt prior to making purchases unlike goods which have a tangible physical presence which consumers are able to test out before purchasing.(Litvin et al, 2005) For marketers of goods, consumers are able to gauge for themselves the quality of the products such as the features, benefits that the product brings and the durability before deciding for themselves if the price is justifiable for purchase. When there is lack of information on something that is not tangible, it is harder to gather credibility of product as there is no physical evidence of quality. (Eisend, 2006) Therefore, consumers have to take reference from secondary sources or mediums usually in the form of eWOM for reviews and testimonials of products. (Lee and Soo, 2014) An example would be healthcare industries such as hospitals. It is hard to just base off company’s image based on their awards and accolades, however, with personal experience, comes proper recommendations that can be given hence swaying the decision for the opinion seeker. Hence, it poses a unique challenge to those engaged in marketing services as they need to attach tangible attributes to an otherwise intangible offering. (ManagementStudyGuide, n.d) Hence, the eWOM reviewers can function as both informants and recommenders in providing and sharing their service experiences with the company and recommendations by previous consumers (Hartman, n.d).Thus, eWOM is relevant and more influential to the intangible and experiential attribute of services (Tag-Eldeen, n.d) rather than in marketers of goods.

Secondly is reliability. Reliability is the ability to deliver the promised service dependably, consistently and accurately.(Peter,1979) Though many services companies such as Telco companies like Singtel and Starhub may list their achievements and awards, however it is not solely responsible in delivering quality consistently and accurately service unlike marketers of goods such as blog shops which consumers stand a higher chance of getting what they paid for such through product attributes and specifications listed . That is when opinion seekers, will turn to secondary information such as eWOM as a form of reliable source to avoid promises that don’t match the actual service delivery. Therefore opinion seekers would use eWOM to seek information from other customers online and especially those whom have experienced the service first-hand. This shows that EWOM have a heavy influence when comes to service marketers so the consumer will be able to gauge for themselves how reliable the service marketer is before engaging with them.

Thirdly is assurance. Assurance is the ability to gain trust from consumers so that they would be confident enough to purchase a service. For service marketing, it is much harder to convey assurance since it depends on the competence of the staffs and their politeness in convincing and gaining trust from customers that their services provided are of quality.(Nguyen, n.d) However for marketer of goods, assurance is easier to gain trust due to their tangible evidence. Eventually, they will rely and turn to online Facebook users such as users whom have provided ratings and comments on the company’s Facebook page in order to gain their input on the service. An example is insurance companies where they have to rely heavily on their agents in gaining the potential customer’s trust so that they will feel secured before applying. Thus, eWOM is particularly relevant to service marketers compared to marketers of goods.

Examples Of Service Providers That Utilises Facebook ‘Check In’

Changi International Airport
Checking into Changi airport itself has benefits due to travellers who frequent the place usually have time on their hands to either shop around. Recommendations and eWOM that are being shared from ‘checked-in’ travellers which would able to be seen by others since it will appear on their timeline as well as their newsfeed as seen in Figure 1 below, enables certain outlets to experience an influx of new customers especially during their ‘Be a Changi millionaire contest’ which encourages visitors to spend money at any of their outlets and stand a chance to win a million dollars. Thus, this is a good form of publicity event that encourages patronage and spending.(Changi, 2015) On top of that, when customers that checks into the airport itself will be able to raise awareness and spread the event by ‘liking’, ‘sharing’ and ‘commenting’ on the post though Facebook capturing the attention of other online users.

Starbucks @ Wilkie Edge
Cafeterias such as Starbucks hardly do paid advertisements; however, they rely heavily on social networking service users to help spread the eWOM. A simple ‘check-in’ from a person could influence people and spread eWOM to purchase product from Starbucks to satisfy their cravings. Especially when the check in includes a post appearing on their timeline and newsfeed of the person trying out a new product creation hence attracting more customer to visit their outlets island wide to try the new product. Such events could generate profit and boost sales across the country. An example as seen in figure 2 below is a ‘Valentine’s Day 1 for 1 offer’ which was spread via mainly Facebook users to create awareness about the special offer. Thus, this benefits the company by getting an increase in patronage and awareness of their special promotion.

Kaplan @ POMO
Students tend to check in from time to time here as they arrive to attend a lesson. Usually the people who either like or comment on the check-in post are either students of Kaplan or potential students who seeks for answers or opinion on the credibility of Kaplan as a private education institution. A positive review will intrigue a person to check out more about the school by hitting the ‘like’ and ‘share’ button to raise awareness on Kaplan’s upcoming events such as open-houses as seen in figure 3 below and Undergraduate seminars. Hence this helps in attracting into potential students that will benefit the institution thus boosting their reputation as a private education institution in the market through the spreading of eWOM from students, lecturers as well as visitors.

Waterway Point @ Punggol
Waterway Point is the latest shopping mall attraction which many constantly checking into the place create further buzz online to visit this prominent mall. This form of eWOM causes an influx of new customers and businesses which aids in the brand’s exponential sales growth. Benefitting from all those eWOM, the mall itself is about to create a buzz/hype which leads to its grand opening where potential shoppers are able to experience the mall at first hand before their official opening itself.(Loh, 2016)

Dunkin Donuts

Dunkin’ Donuts’ ‘Get Gifted’D’ event is rewarding customers with prizes upon simply checking- into any of their store outlets. It is considered as a financial incentive and it can be seen as a win-win situation where consumers are getting financial benefits in exchange in spreading eWOM trough social networks. (Hutchings, 2011) The goal is to attract people to repeat sales with them as well as to get people talking by spreading eWOM through Facebook. Thus, the more people spread eWOM through ‘liking and’ sharing’ their Facebook ‘check-in’ post, the more their profits will be sky-rocketed due to the raise in awareness.

In conclusion, eWOM is particularly relevant to service marketers than marketer of goods due to intangibility, reliability and assurance as identified in the five examples of service providers that utilises eWOM above.

QNS 2:

What are Positive & Negative eWOM

Positive and negative eWOM refers to the positive and negative reactions and communications that customers share amongst each other after purchasing goods/services online.(Permyakova, 2012) According to (Aardenburg, 2013), “positive and negative eWOM has a positive/negative impact on the shift in the receiver’s purchase probability.’” Thus, it makes it crucial for service marketers to manage and influence the communication that is being spread across social media sites such as Facebook to maintain their brand image.

Ways Service Providers Manage Positive & Negative eWOM

Managing Positive eWOM

Firstly is rewarding for positive e-referrals from consumers. E-Referral refers to the online platform that enables seamless transfer of information from one person to another. Internet referral marketing can potentially spread faster and to a wider audience than most offline marketing strategies. (Naseriasl et al, 2015) By offering customers an additional incentive for referring a friend is a simple yet effective way to capture attention and reward them for spreading the eWOM online. An example would be Baskin Robins in figure 6 below which has taken an active step in building positive eWOM by encouraging consumers to create a Facebook group and ‘invite’ exactly 31 friends so that they can ‘like’ their page in exchange for coupon of Free ice cream. This further incentivizes the regular customer to spread the eWOM and raising awareness to their friends about their business, and in turn able to reap huge profits due to the influx of patronage.( Bouwmeester, 2011) Hence, it is considered as a financial incentive and it can be seen as a win-win situation where consumers are getting financial benefits in exchange in spreading eWOM.(Lin, 2013) Other than rewarding them with free ice-cream, offering reduced rates and credits for e-referrals also allows the consumer to save a few bucks by spreading the eWOM about the company.

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Secondly is always to thank the consumer within 24 hours of receiving a positive eWOM.(Yahya et al, 2014) It can be done by thanking them as soon as the feedback comes in as a form of private message, posting a comment on the consumer’s Facebook wall, email and etc. It acts as a form of recognition for their act and shows that the company values, appreciates and acknowledges their spread of positive eWOM. By doing so, it increases the likelihood they will do it again and attract potential consumers to experience it as well. Thus, based on the saying ‘when an object in motion remains in motion, while an object at rest remains at rest,’ shows that marketers have to be proactive and ensure to thank consumers for their eWOM regardless of the outcome.

Managing Negative eWOM

On the other hand, due to the nature of eWOM, lots of unfiltered information is developed by unknown participants. Opinions virtually have no limitation in expressing opinions online and ‘information explosion’ may follow.(Dahlgaard-Park, 2015)Since social Facebook ‘check-in’ enables people to say anything on the company’s brand page, to anyone, at any time, it triggers negative eWOM to be shared. Thus it’s important for marketers to manage them by adopting an appropriate response guideline as well as monitoring customer’s eWOM to prevent it from going viral.

Firstly is adopting a response strategy. According to (Thomas et al, 2012, pp.93-95), “a response strategy involves listening, acknowledging and potentially addressing negative feedbacks generated by social media.” These negative eWOM ranges from individual responses to a mass audience that creates a ‘firestorm.’(Payne, 2015) Therefore, adopting a response strategy to minimise unfavourable negative eWOM from further going viral and keeping it under control is important. (Peneva, 2015) Marketers should adopt a step-by-step response guideline to acknowledge and respond well and fast enough to a poor review/ comment posted to prevent it from going viral which would be harder to be solved then. (Kaijasilta, 2013) In figure 7 below is an example of a poor response from a cafe service provider, as they fail to provide a good and prompt response towards their consumer as the comment was only being replied 1 month after the complaint was posted. Eventually, the café faced a backlash after they gave an inappropriate response towards the review. This type of poor response could cause the service providers to lose customers’ respect and credibility since society has a negative perception on the quality of their services beforehand.

Thus, what should had been done was to firstly thank the customer for taking their time in sharing their thoughts online followed by giving a sincere apology as seen in figure 8 below by using phrases like “We’re sorry you feel that way” and “Absolutely, positively unacceptable on our part.” Next is to offer to make it right. By fixing a problem helps companies win over critics and it acts as a form of service recovery. (Michel et al, 2009)

Lastly is to monitor closely in a timely manner of their complaints, reviews and posts and further improve on their weaknesses to ensure such bad incident won’t repeat itself. The quicker the company responds, the better their customer service will appear to the customers. (Canhoto &Clark, 2013) This can be seen in figure 8 below that the unhappy customer appreciates the company’s effort in acknowledging, giving a prompt response, getting back to the customer and monitoring the issue which reflects on their good service recovery skills. Therefore, responding to the negative reviews with careful and well-delivered message could help to prevent from eWOM going viral which could tarnish the brands reputation as well as preventing customers especially their loyal ones to switch to other providers.

In conclusion, service providers are able to manage positive eWOM through rewarding customers for e-referrals and thanking them where as they could adopt an appropriate response strategy and monitor closely in managing negative eWOM from going viral.

QNS 3:
Factors consumers take into account when evaluating firm-generated versus peer-generated eWOM communications

Firm-generated eWOM communications are information that is created and generated by firms and organizations that is intended to spread virally amongst the consumers whereas peer-generated eWOM is information that is spread informally by members of the public and are not affiliated to any firm or organizations.
(Rodgers and Wang, 2011, pp. 212-231)

First up is credibility. Peer-generated eWOM is generally viewed as the more credible and trustworthy source of eWOM between the two. (Nowak and McGloin, 2014) Peer-generated eWOM is seen as being unbiased and does not have the need to hide any undesirable features of the product or service. Consumers consider peer generated over firm generated when evaluating eWOM as the messages spread by other consumers are more trustworthy and unbiased (Willemsen, n.d.). Informal peer generated eWOM is perceived as being more credible than firm sale forces and advertising as they do not represent any commercial interest and have little to gain. (Cheung et al, 2015). Therefore, online consumers are used to relying on other consumers’ product/service ratings to make their purchasing decision. Hence, the greater the perceived expertise of the source is, the greater their perceived trustworthiness. (Browning et al, 2013)

Secondly is trust. EWOM generates almost double the sales of generic advertising and also seeks to retain customers better. In the past, people usually only focused on bloggers or celebrities as their peer-generated eWOM. That has changed as today not only are people with a large number of followers on social platforms considered influencers, people who are generally knowledgeable on the topics can also become a useful form of eWOM. This builds trust as people acknowledge the fact that they are knowledgeable about the product or service they are talking about. Peer-generated eWOM is more influential than firm-generated eWOM because brands today are not what they companies say about themselves, but based on what consumers telling one another about the companies.

Third is ambiguity of the person posting. People tend to automatically assume that comments posted on forums are that of a random person and not marketers. On many forums, active users can input anything they want as their username and say anything favourable about products. (Rudolph and Morrison, 2008) How often did you stop to think, could the information posted on this forum be by a marketer instead of a random person? Marketers can use this opportunity to blend into online forums or social networking sites disguised in a typical online persona to influence the thought process of other members seeking to find out more.

Why should marketers be interested in opinion leaders?

Opinion leaders are members of the public with the capability to influence society’s opinions and actions. They range from journalists, celebrities to business leaders. They are the ones to whom others look for advice and information. (MediaMiser, n.d)

Firstly, marketers should be interested in opinion leaders due to their sizable following in their area of interest. They have a great exposure to mass media, degree of social interaction and a high socioeconomic status which enables them to spread an innovation effectively. (Cheong and Morrison, 2008) For example, companies such as L’Oreal use bloggers and celebrities as opinion leaders. By paying a huge sum of money for having celebrities endorse a product appearing in advertisements and infomercials, would automatically mean an increase in product awareness, brand recognition and boost in the product’s reputation.

Following that, by appealing to opinion leaders whom have huge influential power and getting in their good books, the opinion leaders might speak out on behalf of the company’s products or services that they have enjoyed. This acts as free advertisement that is largely more effective than mass marketing which has a tendency to fall on deaf ears to the consumers. (Serazio, 2010) On the contrary, going against the will of the opinion leaders could lead to bad press and paint the company in a negative spotlight.

Thirdly an opinion leader adds value to the brand and expertise because he or she discovers, educates, evaluates, compares and introduces the products to a wide audience. (Bilkova, 2015) Hence, they hold the power to shape the public’s perception of everything, including the brand. For example are famous bloggers or known as buzz agents such as Zoella, Xiaxue, Tanya Burr, whom help to build and spread buzz about products and services due to their hands-on product experience and act as influencers whom have a high social influence which encourages and influences their loyal followers to adopt the brands they rave about. Hence, marketers should target opinion leaders due to their enormous influential power.

In conclusion, factors such as credibility, ambiguity and trust are being taken into account when evaluating firm-generated eWOM versus peer-generated eWOM. Also, marketers should be interested in opinion leaders due to their huge sizable following, enormous Influential power and their expertise.

QNS 4:

Since there is a growing trend of highly smartphone-equipped users, it aids in the accessibility and opportunity of sharing and spreading eWOM anywhere, any time and to anyone. Thus, eWOM can bring several advantages and disadvantages for service marketers since it can result in sharing of positive and negative implications for firms/service marketers, means in creating formulation of ‘pull strategies’ to draw consumers in as well as being able to collect and studying of explicit and implicit purchase information.

Positive: Firstly, the Facebook ‘check in’ feature allows passing on positive eWOM to others. Positive eWOM is when consumers share their positive information about companies’ products and services through online bulletin board systems, discussion groups and etc. Unlike traditional WOM, eWOM communications possess unprecedented scalability and speed effectiveness of positive communication diffusion.(Cheung and Thadani, 2012) As with WOM, sharing of information is between small groups of individuals in synchronous mode but with eWOM, it’s a larger scale. When ‘check-in’ users ‘like,’ comment, write reviews or testimonials on the company’s Facebook brand page, their posts are then displayed immediately on their timeline and newsfeed which is viewable by others. In turn, others are also able to ‘like’, comment and check out the page which helps raise brand awareness and lures potential customers in to increase patronage. Consumers rely on information from others to make purchasing decision, especially in uncertain situations. Thus, this is a form of viral marketing whereby by it relies on consumer communication as a means of multiplying a brand’s popularity through customers spreading the brand name of a product or name of a company. It encourages individuals to pass on a marketing message to others, creating the potential growth in the message’s exposure and influence allowing the message to spread like virus. (Mills and Law, 2004) Thus, such eWOM are able to spread fast and reach millions. An example would be KLM’s ‘Happy Holidays Surprise’ video shown below in figure 9 that went viral and had over 10 million likes and 4.1K shares on Facebook. Thus, the company was able to enjoy huge viral benefits by people spreading the eWOM. Hence, when the ‘check-in’ user had a good experience, it aids in building brand awareness, boost overall marketplace image, increased sales and brand loyalty. Hence, it aids in positive eWOM diffusion.

Secondly, it creates a formulation of ‘pull strategies’ in drawing consumers in (Connor, 1997) such as being able to easily share ads, coupons, videos, promotions, upcoming competition, announcements and etc as seen in figure 10 below which alerts their consumers of the latest upcoming competitions and giveaways so that they are able participate and spread eWOM. This is a way of engaging the customers to take part using their 3E’s of marketing which are engage, educate and earn. (Brafton, 2012) EWOM capitalises on web facilities such as sharing of links/url, pictures and information which makes it easier for consumers to pass along marketing messages which in turn would benefit the company. Thus, companies get a lot more exposure with no extra effort. Since mobile content can be easily shared among users, mobile marketing can have huge viral benefits.

In increasing the chances of eWOM from consumers, it relies on how active the brand marketer is and the level of engagement between the brands and its audiences. Thus, online clothing companies such as Tobi as seen in figure 11 below offers all customers 50 % off their first purchase by having to like their Facebook page and posting it on their timeline first in order to redeem their code. Thus, these consumers act as brand advocates for them. This is a great way to give people an opportunity to get this first order discounted and potentially make them returning customers. However Tobi doesn’t stop there, they came up with another pull strategy by asking consumers to invite five of their friends to sign up for accounts in order to get another 50% of their 2nd purchase as seen in figure 12 below. Thus, by experimenting with their audience, companies are able to see what kind of content customers engage themselves with the most and help them to reach and influence others. By doing as such, they are able to analyse and assess the effectiveness and marketing efforts of their advertisements. The higher their number of likes, the more Facebook users’ attention will be grabbed and drawn into as compared to a brand page with small number of likes. Thus, they could further tap into a form promotional strategies for smartphone users.

Lastly, smartphone-equipped users provide marketers with an abundance of explicit and implicit purchase information that can be obtained through their comments and review section. They are able to gain unparalleled access into consumer’s daily lives and to better understand them through their feedbacks and recommendations that are being posted so that appropriate measures for improvement could be taken. This helps the mobile marketers better understand and analyse user behaviour, thus improving their own standards of service. They are also able to learn how customers `feel about their brand, products and services. Furthermore, user’s activity and response can be tracked almost instantaneously by marketers the soon the ‘check-in’ and ‘like’ their brand page. According to Facebook, “marketers can view information from three different groups of customer data and location information that can potentially be available for targeting their marketing products/services at. “(Facebook, 2014) As seen in figure13 below, it shows audience insights that marketers are able to utilize. It provides data such as their demographics on the basis of general Facebook users and those consumer’s whom have interacted with their page such as those whom ‘checked-in’, ‘liked’ and ‘shared’ their page so that they can know which segment to target and craft their marketing efforts at as well as to those whom contribute to most of eWOM. Hence, marketers are able to gain trends and insights through having customers who are highly-equipped smartphone-users.

Negative:

Firstly, by marketers having highly-connected smartphone users using the ‘check-in’ feature, it brings about no control over information sharing online. Dissatisfied consumers are able to spread negative eWOM easily and fast to a wide range of audience anywhere and at any time such as sharing of negative evaluations and feedbacks. In social media settings, consumers provide online feedback about products, and this feedback is visible to other agents, including other consumers, channel partners, competitors, and investors. Dissatisfied customers are more likely to post public warnings about a bad product and give their ratings as shown in figure 14 below with people rating the Toss N Turn salad bar a low rating of 1 star due to their dissatisfied dining experience which could be seen publically. These low ratings would affect a change in impression of other potential customers to dine at their place due to the negative eWOM, comments and feedbacks. The comments that take place can not only help a good product sell faster or gain recognition, but also cause a poor product/service to fail rapidly within days due to the message going viral. Since majority of the society have their smartphones with them often, this means that they can be reached and notified of current happenings which results in sharing of negative eWOM. Also, with having a smartphone, people will be exposed to different social media platforms through Apps other than Facebook such as Twitter, Instagram, Snapchat and etc. This then increases the risk on the brand since people have access to a wider range of platforms other than Facebook for them to spread the information to. Thus, if there’s lack of control on the management’s and the service marketer’s part, this would eventually lead to reputational damage, decreases in patronage, firm performance, and value. Hence, it will affect the sales and profitability of the company.

Secondly, since majority of the society are smartphone users, marketers will be exposed to an increased level of competition due to the accessibility of alternative/ mutual service providers around their area enlisted on Facebook once they ‘check-in’ and access the brand’s page as seen in figure 15 below. Facebook has a column where it lists down a wide selection of similar companies .They have tabs like ‘what consumers also liked’ that others have liked and raved about and written good testimonials, ratings, comments and recommendations on. Thus, consumers are exposed to a wide range of eWOM and a selection of alternatives where they are able to read comments/testimonials/rating/reviews of other customers whom have experienced the service there and evaluate/compare products, services, attributes, prices and etc which poses a threat for the marketing brand. Due to high level of competition of products /services of the rival firms, this increases the threat of substitute for marketers. Thus, having highly-equipped smartphone customers poses not only opportunities for marketers in spreading their eWOM, but also negative.

In conclusion, passing on positive eWOM, pull strategies and gaining abundance of explicit and implicit purchase information are the benefits marketers get from highly equipped smartphone consumers whereas attaining negative feedback and exposure of increased levels of competition are the disadvantages of having such highly-equipped customers.

QNS 5:

What are reference groups

Consumer reference groups can be defined as a person or group of people that significantly influences an individual’s behaviour. (William and Michael 1982,184) They are groups that consumers compare themselves to or associate with. It serves as a point of comparison or frame of reference for an individual in forming either general or specific values, attitudes or a specific guide for behaviour in influencing other consumers’ consumption patterns such as friends, religious groups, celebrities and etc.

There are 2 major types of reference groups, which are normative and comparative reference groups. Normative reference groups include parents, co- workers, teachers, and peers who provide the individual and influences their norms, values, and attitudes through direct interaction. Comparative reference groups are groups of individuals who people compare themselves against/ benchmark for specific attitudes/ behaviours and strive to be like such as sports heroes or entertainment figures who provide standards of achievement to which individuals aspire and admire. Hence, normative reference groups influence the development of a basic code of behaviour; while comparative influence the expression of specific consumer attitudes and behaviour. (Schiffman et al 2014, pp. 289-292)

According to diagram16 above, which shows the major societal groupings that are family, friends, social class, subcultures, own culture and other cultures. The closer the societal group is to the individual, the more likely it influences the individual. For a Facebook consumer, their major societal groups starts from friends all the way to other cultures since Facebook consists of interaction with friends. Although, there are several elements of family or social class, most of Facebook community consist mostly friends and it is rare for user to display interaction with their family on social-media.

Application of Reference Groups In Context

Since Facebook is the largest online social media platform that contains plenty of online communities such as social networks, they usually consist of virtual groups and communities which are internet- based groups which enable users to access extensive amounts of information, fellowship as well as social interaction based on different issues.( Dholakia et al, 2004) Facebook communities differ from their profiles and pages in that it is a forum for users to create, share and discuss content around common interests such as hobbies, sports, causes, events etc.

Virtual communities provide opportunities for marketers to address consumer’s niche interest and enhance consumption experience. The exchange of knowledge within the Facebook community aids in helping good products sell faster and poor products fail rapidly.

It makes it easier to chat, ask for help, lodge complaints, share experiences, get information about brands, and collaborate in the new products developments for consumers. These interactions have affected several aspects of consumer behaviour and associated managerial practices, including value creation brand loyalty and brand experience. (Scaraboto et al, 2012)

Reasons as to why Virtual Community Reference Groups Of Interest To Marketers & Examples of how they influence Facebook users’ decision-making process.

Firstly, they expose people to new product/innovations in a variety of ways in influencing individual’s attitudes and create pressure to conform to group norms. When new inventions come out, marketers don’t need to spend money on traditional marketing since virtual communities can help marketers to sell their products or services faster and at targeting at a wider audience range. As seen in figure 17 below, it shows Tiffany & Co’s group page where they aid in increasing brand awareness and promotion of their new arrivals summer line. Thus, virtual reference groups exercise impact and influence in which people select, purchase and use a product or service offerings or brands. Thus, marketers make effective use of virtual community reference groups in bringing about changes in a consumer’s thinking and decision-making pattern.

Secondly, marketers use virtual community reference groups since they are powerful, attractive and they lend credibility to products and services that is able to induce changes in consumers’ attitudes and behaviours. For example if consumers are concerned about obtaining accurate information about a product/service such as the performance and quality, they are likely to be persuaded by those whom are trustworthy and knowledgeable. Hence, they are persuaded by high sources of credibility. Virtual communities have a good level of expertise in particular areas which enable them to exert informational influence on shopping decisions by facilitating the transfer of information among reference group members regarding product evaluations, preferences, as well as opinions. Thus, it acts as a 'social proof.’ For example if consumers are concerned about obtaining accurate information about a product such as the performance and quality, they are likely to be persuaded by their virtual group which they consider to be trustworthy and knowledgeable. Therefore, it serves to lower the perceived risk in purchasing a specific product due to being exposed to testimonials from adopters/users of the products itself.

Lastly, virtual communities’ provide opportunities for marketers to address consumers with a particular common interest, and have the ability to enhance consumption experience. It is due to the exchanged of knowledge being taken place that aids in the sale of the product/service. For an example in figure 18 below, it shows a popular virtual community of a popular Yoga class in the US. As seen below, there are several knowledge exchanges regarding class & instructor details, experiences, different yoga packages that they took up and etc. Thus, it aids in web-based discussions and act as a form of forum for people to discuss topics of interests which in turn will help them to gain insights in aiding/influencing their decision-making process. It provides individuals with the opportunity to compare their own thinking with the attitudes and behaviours of the community. Therefore, by being able to be exposed to the community’s discussions, marketers are able to further enhance their products/services that they are offering and craft them to enhance customer satisfaction.

In conclusion, virtual community reference groups are of interest to marketers due to their exposure of people to new product/innovations in a variety of ways in influencing individual’s attitudes and decision-making process by creating pressure to conform to group norms, their powerful, attractive and they lend credibility to products and services and opinions generate discussions and highlight what customers want and attain feedback.

Recommendations

Firstly, negative eWOM can have a negative impact on the perception and evaluation of brands and a detrimental effect on the consumer’s decision-making process (Lindenblatt, 2014) Thus, in order to combat negative eWOM, service marketers are able to implement and practice web care where it enables a company’s detection and intervention (Malthouse, 2007). Web care is the act of engaging in online interactions with consumers, by actively searching the web to address consumer feedbacks such as comments, questions and complaints.(Noort and Willemsen, 2012) Thus, companies are able to hire a web care team in monitoring the online Facebook platform where their brands are likely to be discussed. The aim of implementing web care is to “restore and improve the brand evaluations or eWOM of complaining customers and to prevent it from going viral and being exposed to other Facebook users.

Web care can be done on a proactive or reactive basis whereby the company is able to respond to any queries/doubts or questions posted by customers as well as responding to complaints and coming up with service recovery if needed that prevents customers in further engaging and spreading negative eWOM. (Noort & Willemsen, 2012) Thus, this helps in limiting the potential damage that such complaints could have on other consumers and affect the brand’s reputation.(Lindenblatt, 2014) By engaging in web care, it portrays that companies take the comments and complaints of consumers seriously, which could lead to more positive brand evaluations. Moreover, if a company addresses consumer complaints adequately, these consumers may stop posting negative eWOM and even start to post positive eWOM about their positive web care encounters with the company.
Secondly, in order to prevent viral campaigns which may lead to eWOM messages being reinterpreted and spread by online users in a way that management never intended to, service marketers are able to target digital influencers and turn them into brand advocates in order to build awareness around certain topics or activities online accurately and clear any misunderstandings on their products/services. Influencers are individuals who have the ability to influence the opinions or buying decisions of target audience, largely thanks to their huge social media following. (Qvist, 2009) It is highly effective for spreading the word about a new product or service accurately and highlighting key features, eliminating any false information about the brand/service that might rise due to a customer’s comments.

An example is shown in figure 19 below, which showcases a viral post on Facebook which a lady turned pink due to Lush’s bath bomb products which made many people question about the safety of their ingredients used in their products. Thus, if Lush didn’t step in and clarify the misconception/rumours that it was due to the user’s negligence of not reading the product directions and using the product the right way, it will spread virally out of control due to a false comment and their brand image will be painted in a negative light prompting existing customers to gravitate towards other competitors such as BodyShop instead. Since then, Lush uses influencers in educating their product line by sending them Lush product samples. Influencers as well as buzz agents who have a large following have the power in conveying rapidly distributing a marketing message accurately. (Keyes, 2010) They are the people whom proactively recommend their favourite brands to others especially in the fashion and beauty industry where customers tend to follow bloggers to see what is trending such as Xiaxue and Zoella which has done several Lush Hauls and explaining the proper ingredients and directions of usage as mentioned by the company itself. Thus, they have the ability to instil deeper connections between the brand and consumers itself by sharing product reviews, testimonials, hauls on Facebook where they highlight important accurate product information to others and so on. By targeting key individuals who have the power, authority and many social connections; aids in a wider form of distribution of accurate information and prevent false/negative viral campaigns/comments being falsely reinterpreted which would tarnish the brand’s reputation.

Lastly, aside from service marketers relying on Facebook’s ‘check-in’ feature in encouraging eWOM, Facebook can take a step further in coming up with the trending search system which social media platforms such as Twitter utilises through the usage of hash tags as seen in figure 20 below. Thus, this list of trending hash tags enables Facebook users to be exposed to the latest news and popular posts in real time. Therefore, brands are able to gain visibility and expand their audience by joining high traffic discussions on topics related to address any negative eWOM posts/comments as well as obtain feedback from customers from them. Thus, hash tag is a great way for businesses to encourage interaction with their customers through sharing upcoming promotions and deals such as the Starbucks Valentine’s day 1 for 1 promotion that they held when they ‘like’ and share their Facebook brand page which would encourage customers to spread eWOM through their social networks.
Therefore, it aids in raising brand awareness and it’s a useful marketing software tool for marketers in influencing the spread of eWOM.

Conclusion

In conclusion, many businesses out there are starting to utilize eWOM to their advantage. EWOM is booming and with Facebook leading the charge as the most used social networking site out there, businesses can use this moment to freely market themselves. Of course, the adverse is also true and it is very important for the company to protect their image in light of bad press against them. The recommendations we have provided are mainly in accordance to soften the impact of the negative eWOM against the businesses or marketers.

By properly utilizing eWOM to their advantage, companies can put themselves in a favourable position against their competitors. This makes it important for marketers in every market to properly understand the essence that eWOM and how this can benefit them in the long run.

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